Page 34 - IAT

genuinely working—or merely paying lip service. executives believe a diverse workforce enhances
Auditors can ensure that diversity efforts are
embedded in everything from hiring practices to
promotion criteria.
Auditing Bias in Hiring and Promotions
Internal audit teams can help uncover
unconscious bias by reviewing hiring,
promotion, and retention practices. Are women
and minorities advancing at the same rate as their
peers? Are there processes in place to mitigate
bias in decision-making?
A recent study by Harvard Business Review
revealed that 60% of employees who perceive
bias in their workplace have a diminished sense
of engagement. This can result in higher turnover
rates and lower productivity. Internal audits can
review exit interview data, hiring demographics,
and promotion timelines to spot trends and help
HR refine their practices.
As one veteran auditor put it: “We’re not just
here to count beans—we’re here to make sure
everyone has a fair shot at cooking them.”
Evaluating DE&I Programmes:
Execution over Documentation
Having diversity programmes in place is one
thing, but are they effective? Internal audit
can assess the effectiveness of DE&I initiatives
by conducting surveys, reviewing training
outcomes, and interviewing employees to get an
honest picture of how inclusive the culture really
is.
For example, a Deloitte study found that 94% of
30 | INSIGHT EXCHANGE
innovation, but only 23% felt their diversity
initiatives were effective. Internal audits can play a
key role in bridging this gap by ensuring that the
organisation’s diversity strategies go beyond just
checking a box.
Below is an example of a graph that highlights the
stark difference between companies with strong
DE&I strategies and those lagging:
Embedding DE&I into Risk Management:
A Proactive Approach
Diversity is not just a human resources issue but
a critical risk factor. According to the IIA, failure
to cultivate diversity in leadership and decision-
making teams can lead to groupthink, resulting
in missed opportunities and even regulatory or
reputational risks.
The IIA suggests that DE&I should be integrated
into broader risk assessments, ensuring that
diversity issues—like potential bias or lack
of inclusion—are evaluated alongside more
traditional risks. By embedding DE&I into risk
management, internal auditors ensure that the
organisation is aware of, and prepared to mitigate,
the risks associated with a non-diverse workforce.
Championing Accountability
Finally, Internal Audit can champion accountability.
Diversity and inclusion should not just be an
HR metric or a once-a-year event. It should
be woven into the fabric of the organisation’s
performance reviews, leadership evaluations, and
key performance indicators (KPIs).
A survey from PwC found that 83% of companies
now include DE&I goals in their leadership
performance objectives. However, without
INTERNAL AUDIT TODAY